The Chicago-based company earned $1.44 per share, compared with $1.89 a year earlier. Kraft Heinz said net sales fell about 5% to $12.37 billion.
Kraft Heinz reports 1H19 results, CEO says level of decline experienced in the first half of this year "is nothing we should find acceptable moving forward"; Co sees brief delay in filing Q2
Q1:
- Reports Q1 earnings of $0.66 per share, excluding non-recurring items, $0.05 better than the S&P Capital IQ Consensus of $0.61; revenues fell 5.5% year/year to $5.96 bln vs the $6.07 bln S&P Capital IQ Consensus.
Q2:
- Reports Q2 earnings of $0.78 per share, excluding non-recurring items, $0.03 better than the S&P Capital IQ Consensus of $0.75; revenues fell 4.2% year/year to $6.41 bln vs the $6.59 bln S&P Capital IQ Consensus.
In connection with the preparation of the first and second quarter financial statements, which occurred concurrently due to the delayed filing of the 2018 Form 10-K, the Company concluded that the fair values of certain goodwill and intangible assets were below their carrying amounts. As a result, the Company recorded non-cash impairment charges to lower the carrying amount of goodwill in certain reporting units (EMEA East, Brazil, United States Refrigerated, and Latin America Exports) by approximately $744 million, primarily based on new five-year operating forecasts for several international businesses that establish revised expectations and priorities for the coming years in response to current market factors. In addition, the Company recorded non-cash impairment charges(3) of approximately $474 million to lower the carrying amount of certain intangible assets, primarily driven by the application of a higher discount rate to reflect the markets' perceived risk in the Company's valuation.
"The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward," said Kraft Heinz CEO Miguel Patricio. "We have significant work ahead of us to set our strategic priorities and change the trajectory of our business. But in my short time with the company, I have developed a strong appreciation for the affinity consumers around the world continue to have for our brands, the talent and determination of our employees, as well as the commitment of our customers. We have a lot to work with and build upon, and our team is motivated by the opportunity to drive the next phase of growth and profitability for Kraft Heinz and our shareholders."
The Company is also filing a Form 12b-25 with the SEC today, disclosing that while the Company is unable to file its Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2019 (the "Q2 Form 10-Q") by the prescribed due date, the Company expects to file the Q2 Form 10-Q on or before the fifth calendar day following the prescribed due date.
Co separately affirmed its regular quarterly dividend of $0.40 per share of common stock
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